Gordon Brown could be leading the last-ever Labour government unless he offers people a chance to change the voting system at the next general election, a prominent leftwing pressure group warns today.

In a doom-laden assessment of the party's prospects ahead of this week's Labour conference in Brighton, the influential thinktank Compass predicts that a Conservative victory would be just the first disaster David Cameron's party would inflict on Labour.

Armed with new polling evidence, it argues in a report to be released at conference that the party would face a triple assault under the Tories that could slash its number of seats at Westminster from 349 at present to a rump of around 130 in opposition.

The collapse of its Westminster representation, Compass argues, is likely because of a greater chance of Scottish independence if the Tories, who are less popular north of the border, came to power.

At a stroke, Scottish independence would strip Labour of its 41 Scottish seats in Westminster. It also predicts the loss of up to 45 more Labour seats as a result of Cameron's plan to cut the overall number of MPs by 10%.

The final blow to its viability as a governing party of the future would come as a result of likely Tory reforms to party funding, which Compass believes would break the historic link between Labour and the trade unions and further destabilise an organisation which is heavily in debt and has a sharply declining membership base.

The report, entitled "The Last Labour Government", says: "These three factors could then combine to ensure that an already intellectually and organisationally weak party fails to ever recover."

Polling conducted for Compass by YouGov to accompany the report shows that, if the Conservatives win power, 34% of the Scottish electorate will be more like to vote Yes in the referendum on independence promised by the SNP by the end of 2010.

The polling shows that 31% of Scots would currently back independence and 53% oppose it. But the extra 34% who say they might be swayed to support a split if the Tories came to power could tilt the balance in favour. "This could be enough to see a Yes vote through," Compass argues.

It predicts that Tory plans to cut the number of Westminster seats by 65 will hit Labour hardest of all the main parties because the biggest reduction will be in areas which have seen population flight, including Labour strongholds in Wales and the industrial heartlands.

Compass argues that the only hope of avoiding catastrophe would be a referendum on voting reform, which could be a "game changer". "It is now the only way for the party not just to avoid crushing defeat but the strong chance that it will never govern again."

It says the offer of a fairer voting system would draw people to Labour and allow it to paint the Tories – who are strongly opposed to ditching "first past the post" – as opposed to reform of a political system severely discredited by the scandal over MPs' expenses: "A referendum moves the party from zero chance of the Tories not losing next May to striking distance of a hung parliament and Labour being the biggest single party. The decision could decide not just Labour's future for one or two parliaments, not even for a generation, but for ever."

Brown is known to be considering offering a referendum on voting reform, possibly in the party's election manifesto. While some senior cabinet ministers, including home secretary Alan Johnson, are pressing the case strongly, others such as Ed Balls, the schools secretary, have serious reservations.

In particular, Balls and chief whip Nick Brown oppose the idea of holding a vote on the same day as the general election, arguing that it will look like gerrymandering, confuse voters and distract from the government's central election message on the economy. Ratcheting up the pressure on Brown, Compass says that Labour desperately needs a "game changer; a policy that wakes up the electorate".

A recent survey by YouGov for the Electoral Reform Society showed that around 30% of Liberal Democrats and 30% of Labour-inclined voters would be more likely to plump for Labour if a referendum on electoral reform was promised.

"Now everyone who wants the party to win, or at least to keep out the Tories, must be able to see the prize of backing a referendum and the dangers of refusing to do so: potential political oblivion," says Compass chairman Neal Lawson.

On party funding, the report says: "The party is already heavily reliant on the unions and could be more so if in opposition. But the Tories, with a healthy majority and a fresh mandate, could easily introduce new funding rules to cut off union funds while allowing business and personal funding to flow and they will be much harder to regulate. The evidence is there that this is exactly what they will do.

"The Conservative argument has been that a donation cap of £50,000 is necessary to restrict influence of companies, individuals and trade unions. Under current legislation, trade union affiliation payments – the collective membership payment of ordinary members – are counted as donations to the party. For the purposes of a donation cap, each trade union would be treated as a single individual within the cap.

"This could end the ability of trade unions to affiliate to the party, ending the relationship that has sustained social progress throughout the last century. Labour without a secure funding basis would find it almost impossible to renew itself."